Hawaiian Holdings Reports Third Quarter 2008 Financial Results

     - Operating revenue increased 24.7% to $339.9 million

     - Revenue per available seat mile increased 23.0% to 13.92 cents

     - Passenger yield rose 34.2% to 15.95 cents

     - Operating income increased 6.9% to $27.3 million

     - Net income totaled $6.0 million, or $0.12 per diluted share
HONOLULU, Oct. 29 /PRNewswire-FirstCall/ -- Hawaiian Holdings, Inc. (Nasdaq: HA) ("Holdings" or "the Company"), parent company of Hawaiian Airlines, Inc. ("Hawaiian"), today reported consolidated net income for the three months ended September 30, 2008, of $6.0 million, or $0.12 per diluted share, on total operating revenue of $339.9 million. This compares to net income of $19.6 million, or $0.41 per diluted share, for the three months ended September 30, 2007. Operating income during the third quarter improved to $27.3 million, compared to $25.6 million a year ago, while higher non-operating expenses related to fuel hedge contracts and an increase in the Company's tax provision reduced net income year-over-year.

For the nine months ended September 30, 2008, the Company reported consolidated net income of $40.5 million, or $0.81 per diluted share, on total operating revenue of $910.3 million. This compares to net income of $3.7 million, or $0.08 per diluted share, for the nine months ended September 30, 2007. Operating income during the nine months improved to $53.8 million, compared to $8.8 million a year ago. Operating income in 2008 includes a litigation settlement of $52.5 million, related to the Company's settlement of its lawsuit with Mesa Air Group.

"The extent of the rise in fuel prices was evident in our third quarter results as extremely strong improvements in both interisland and transpacific revenue were offset by the high cost of fuel," commented Mark Dunkerley, the Company's president and chief executive officer. "Our results, nonetheless, bettered the sizable losses posted by many of our principal competitors."

"The retreat of fuel prices from historic peaks reached in the summer will lower our operating costs, but our enthusiasm over this is tempered by the uncertain economic environment and its effect on short and medium term demand for Hawaii vacations.

"Through this eventful year the one constant has been the outstanding contributions from all of Hawaiian's employees. Their response to the collapse of two major competitors and performance under the operational strain of a rapid expansion of our interisland operations has been fantastic. Our team is the best in the industry and our ability to rely on their continued dedication gives us confidence to meet the challenges and opportunities that lie ahead," concluded Mr. Dunkerley.

Third Quarter Operating Results

The Company reported operating income of $27.3 million in the third quarter of 2008, a 6.9% increase, compared to operating income of $25.6 million in the third quarter of 2007.

During the third quarter Hawaiian significantly expanded its short haul interisland operations, while long haul capacity increased by a much smaller proportion. Since shorter haul operations tend to have both higher revenue and costs per seat mile, this shift in mix of flying toward a higher percentage of shorter segment interisland operations tends to inflate both revenue per available seat mile (RASM) and cost per seat mile (CASM) relative to the prior year.

Third quarter 2008 operating revenue was $339.9 million, a 24.7% increase compared to the third quarter of 2007. Capacity for the quarter increased 2.6% year-over-year to 2.4 billion available seat miles (ASMs), resulting in RASM of 13.92 cents, up 23.0% from 11.32 cents in the third quarter a year ago. Third quarter load factor decreased to 80.3% from 87.8% in the same period a year ago. Passenger yield (passenger revenue per revenue passenger mile) increased 34.2% to 15.95 cents from 11.89 cents in the third quarter of 2007.



    Hawaiian Holdings, Inc.
    Selected Statistical Data

                            Three Months Ended          Nine Months Ended
                               September 30,               September 30,
                           2008     2007   Change    2008     2007   Change

    Scheduled Operations:
      Revenue passenger
       miles (RPM)(a)    1,956.1  2,083.9  (6.1%)  5,920.6  5,926.2  (0.1%)
      Available seat
       miles (ASM)(a)    2,435.6  2,373.2   2.6%   7,097.9  6,773.8   4.8%
      Passenger revenue
       per RPM             15.95    11.89  34.2%     14.15    11.18  26.6%
                           cents    cents            cents    cents
      Passenger load
       factor (RPM/ASM)    80.3%    87.8%   (7.5)pt. 83.4%    87.5%   (4.1)pt.
      Passenger revenue
       per ASM (PRASM)     12.81    10.44  22.7%     11.80     9.78  20.7%
                           cents    cents            cents    cents

    Total Operations:
      Revenue passenger
       miles (RPM)(a)    1,959.3  2,111.2  (7.2%)  5,932.6  6,015.9  (1.4%)
      Available seat
       miles (ASM)(a)    2,441.4  2,408.2   1.4%   7,114.2  6,881.1   3.4%
      Passenger load
       factor (RPM/ASM)    80.3%    87.7%   (7.4)pt. 83.4%    87.4%   (4.0)pt.
      Operating Revenue
       per ASM (RASM)      13.92    11.32  23.0%     12.80    10.64  20.3%
                           cents    cents            cents    cents
      Operating Cost
       per ASM (CASM)      12.80    10.26  24.8%     12.04    10.51  14.6%
                           cents    cents            cents    cents
      CASM - excluding
       litigation
       settlement          12.80    10.26  24.8%     12.78    10.51  21.6%
                           cents    cents            cents    cents
      CASM - excluding
       litigation
       settlement and
       aircraft fuel        7.43     7.07   5.1%      7.92     7.54   5.0%
                           cents    cents            cents    cents

    (a) In millions.


Total operating expenses for the third quarter of 2008 increased 26.6% year-over-year to $312.6 million, resulting in operating cost per available seat mile (CASM) of 12.80 cents, up 24.8% versus the same period a year ago. Excluding fuel, third quarter CASM increased 5.1% to 7.43 cents versus 7.07 cents for the same period a year ago.

Aircraft fuel costs increased 70.8% year-over-year in the third quarter to $131.2 million and represented 42.0% of operating expenses. Hawaiian's average cost per gallon of jet fuel increased 67.9% year-over-year in the third quarter to $3.83 (including taxes, and delivery), while block hours increased 7.1% primarily reflecting increased 717 operations. During the current year period, benefits of hedging activities are included in non- operating income/expenses, and as such are not reflected in fuel expense. During the quarter, Hawaiian realized losses of $0.5 million on settled fuel derivative contracts, whereas non-operating expense reflects the recognition of $9.2 million in losses from Hawaiian's fuel hedging activity which includes both realized gains and losses as well as changes in mark-to-market value of fuel derivative contracts.



                         Economic Fuel Reconciliation

                                                       Three months ended
                                                          September 30,
                                                              2008
                                                          (in million)
    GAAP fuel expense, including taxes
     and delivery                                            $131.2
    Settlement of fuel derivative
     contracts in the current period                            0.5
    Economic fuel expense in the current period              $131.7


As a result of the rapid increase in operations following the withdrawal of service by two significant competitors, Hawaiian increased its staffing levels and training activity. Wages and benefits expenses increased by $8.1 million in the third quarter of 2008 from the comparable period in 2007 primarily as a result of increased operating activity.

Commissions and other selling expenses decreased $3.7 million to $10.4 million primarily due to a reduction in the value of Hawaiian's frequent flyer liabilities. This credit adjustment was partially offset by higher credit card processing charges, booking fees and commissions associated with Hawaiian's increased revenue.

Third quarter 2008 non-operating expense totaled $12.7 million, as compared to non-operating expense of $3.7 million in the third quarter of 2007. Lower interest expense in the third quarter of 2008 was offset by lower interest income, while expenses totaling $9.2 million related to Hawaiian's fuel hedging activities accounted for the majority of the year-over-year increase in non-operating expense. The fuel hedging expenses include $0.5 million of realized losses on derivative contracts settling in the quarter, the reversal of $4.9 million of previously recorded gains on these same contracts, and $3.8 million in unrealized losses related to fuel derivative contracts settling in future periods.

    Liquidity, Capital Resources and Fuel Hedging

    -- As of September 30, 2008, the Company had unrestricted cash and cash
       equivalents and short-term investments of $224.8 million, and $34.7
       million in restricted cash.  The Company also held $34.1 million in
       Auction Rate Securities (at fair value), all of which are recorded as
       long-term investments.

    -- As of September 30, 2008, the Company's debt included $92.4 million in
       two term loans at the Hawaiian level, $111.4 million in floating rate
       notes issued in conjunction with the acquisition of three Boeing
       767-300 ER aircraft in December 2006, and additional notes payable of
       $14.1 million.

    -- In September 2008, the Company issued 3.55 million shares of its common
       stock upon exercise of outstanding warrants to purchase common stock
       for $5.00 per share that were originally issued in connection with an
       additional credit facility in 2006.  Pursuant to the terms of the
       warrants, as a result of the exercise, the Company received proceeds of
       $13.0 million in cash and $4.8 million in aggregate principal amount
       (at par value) of tendered term loan securities.

    -- A summary of the Company's fuel derivatives contracts as of October 24,
       2008 is available following the Consolidated Statements of Operations
       at the end of the press release.


    Recent Business Highlights

    -- In early October, Hawaiian welcomed the first of four Boeing 717-200
       jets that are being added to its interisland fleet to increase
       operating efficiency and improve its flight schedule for customers. The
       other three jets will join the fleet, one per month, in November,
       December and January, giving Hawaiian a total of 15 B717s for its
       interisland service.

    -- In early October, Hawaiian announced that it was ranked by the U.S.
       Department of Transportation as the nation's #1 carrier for on-time
       performance and baggage handling in August.

    -- At the end of September, Hawaiian announced that four extra flights
       have been added during the holidays to its regularly scheduled service
       between Honolulu and Pago Pago, American Samoa, in anticipation of
       increased passenger traffic.

    -- At the end of September, Hawaiian appointed Dennis "Manny" Manibusan as
       the Company's vice president of maintenance and engineering,

    -- In mid-September, in conjunction with its ongoing effort to reduce fuel
       costs, Hawaiian Airlines has signed an agreement with Aviation Partners
       Boeing to purchase Blended Winglets for installation on eight Boeing
       767-300ER jets, and options to purchase seven additional pairs of
       Blended Winglets.

    -- In the beginning of September, Hawaiian announced that for the ninth
       consecutive year it will be carrying Oakland Raiders to their road
       games and providing the 'Silver and Black' with a style of service
       dedicated to helping the players, coaches and staff get ready for
       football.

    -- In the beginning of August, Hawaiian announced that for the second
       straight year, the defending NFC West Division Champion Seattle
       Seahawks will fly to their road games enjoying the wide-body comfort
       and award-winning service of Hawaiian.

Investor Conference Call

Hawaiian Holdings' quarterly earnings conference call is scheduled to begin later today (Wednesday, October 29, 2008) at 4:30 p.m. Eastern Time (USA). The conference call will be broadcast live over the Internet. Investors may listen to the live audio webcast on the investor relations section of the Company's website at http://www.HawaiianAirlines.com. For those who are not available for the live broadcast, the call will be archived on Hawaiian's investor website.

About Hawaiian Airlines

The nation's top-ranked airline for service in the 2007 Airline Quality Ratings, Hawaiian has led all U.S. carriers in on-time performance for each of the past four straight years (2004-2007) and in fewest misplaced bags for the past three years (2005-2007) as reported by the U.S. Department of Transportation.

Consumer surveys by Conde Nast Traveler, Travel + Leisure and Zagat have all ranked Hawaiian as the top domestic airline serving Hawaii.

Now in its 79th year of continuous service in Hawaii, Hawaiian is the state's biggest and longest serving airline, as well as the second largest provider of passenger air service between the U.S. mainland and Hawaii. Hawaiian offers nonstop service to Hawaii from more U.S. gateway cities (10) than any other airline, as well as service to the Philippines, Australia, American Samoa, and Tahiti. Hawaiian also provides approximately 155 daily jet flights among the Hawaiian Islands. Hawaiian Airlines, Inc. is a subsidiary of Hawaiian Holdings, Inc. (Nasdaq: HA).

Additional information is available at HawaiianAirlines.com.

Forward-Looking Statements

The foregoing information contains certain forward-looking statements that reflect the Company's current views with respect to certain current and future events and financial performance. These forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the Company's operations and business environment which may cause the Company's actual results to be materially different from any future results, expressed or implied, in these forward-looking statements. These risks and uncertainties include, without limitation, aviation fuel costs, competition in the interisland markets, competitive pressure on pricing, ability to negotiate labor agreements, our ability to satisfy financial covenants and our new long term commitments for aircraft. Any forward-looking statements in this release are based upon information available to the Company on the date of this release. The Company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any statements expressed or implied therein will not be realized. Additional information on risk factors that could potentially affect the Company's financial results may be found in the Company's filings with the Securities and Exchange Commission.



    Hawaiian Holdings, Inc.
    Consolidated Statements of Operations
    (in thousands, except for per share data) (unaudited)

                                       Three Months Ended    Nine Months Ended
                                          September 30,         September 30,
                                         2008      2007       2008      2007

    Operating Revenue:
      Passenger                        $312,028  $247,728  $837,554  $662,443
      Cargo                              10,775     8,111    27,553    22,555
      Charter                             1,130     2,607     2,274     7,223
      Other                              15,985    14,061    42,948    39,649
        Total                           339,918   272,507   910,329   731,870

    Operating Expenses:
      Aircraft fuel, including
       taxes and oil                    131,233    76,821   345,646   204,279
      Wages and benefits                 61,646    53,585   183,905   171,528
      Aircraft rent                      24,041    24,629    71,176    73,208
      Maintenance materials and repairs  23,950    21,122    83,285    69,420
      Aircraft and passenger servicing   13,859    13,172    41,845    41,109
      Commissions and other selling      10,394    14,056    46,710    42,436
      Depreciation and amortization      11,922    11,958    35,696    33,353
      Other rentals and landing fees     10,470     7,521    27,583    21,324
      Litigation settlement                 -         -     (52,500)      -
      Other                              25,094    24,091    73,211    66,390
        Total                           312,609   246,955   856,557   723,047

    Operating Income                     27,309    25,552    53,772     8,823

    Nonoperating Income (Expense):
      Interest and amortization of debt
       discounts and issuance costs      (4,777)   (6,397)  (15,257)  (19,353)
      Interest income                     1,913     2,729     5,773     7,924
      Capitalized interest                  -         -         -       1,309
      Gains (losses) on fuel derivatives (9,182)     (238)    5,269    (1,984)
      Other, net                           (668)      174      (532)      109
        Total                           (12,714)   (3,732)   (4,747)  (11,995)

    Net Income (Loss) Before Income
     Taxes                               14,595    21,820    49,025    (3,172)
      Income tax expense (benefit)        8,558     2,243     8,558    (6,916)

    Net Income                           $6,037   $19,577   $40,467    $3,744

    Net Income Per Common Stock Share:
      Basic                               $0.13     $0.41     $0.85     $0.08
      Diluted                             $0.12     $0.41     $0.81     $0.08

    Weighted Average Number of
    Common Stock Shares Outstanding:
      Basic                              47,828    47,203    47,571    47,190
      Diluted                            52,078    47,305    49,883    47,362



                         Fuel Derivative Contract Summary

    As of October 24, 2008:
                                                                   Percentage
                         Weighted                                      of
                          Average     Ceiling Price                 Quarter's
                      Ceiling Price       Range         Gallons    Consumption
                       (Per Gallon)   (Per Gallon)      Hedged*      Hedged

    Fourth Quarter 2008:
      Heating Oil         $3.46      $3.18 - $3.63       4,200          13%
      Crude Oil           $2.73      $2.31 - $3.33       9,450          29%
      Total                                             13,650          42%

    First Quarter 2009:
      Heating Oil         $3.35      $3.24 - $3.51         630           2%
      Crude Oil           $2.58      $2.10 - $3.05       7,728          23%
      Total                                              8,358          25%

    Second Quarter 2009:
      Crude Oil           $2.46      $2.11 - $2.66       3,780          11%

    Third Quarter 2009:
      Crude Oil           $2.33      $2.16 - $2.39         672           2%


                                                                   Percentage
                         Weighted                                      of
                          Average      Floor Price                 Quarter's
                        Floor Price       Range        Gallons    Consumption
                       (Per Gallon)   (Per Gallon)     Hedged*       Hedged

    Fourth Quarter 2008:
      Heating Oil         $3.25       $2.73 - $3.63     7,854           24%
      Crude Oil           $2.09       $1.88 - $2.24     2,562            8%
      Total                                            10,416           32%

    First Quarter 2009:
      Heating Oil         $3.05       $2.82 - $3.51     2,106            6%
      Crude Oil           $1.96       $1.43 - $2.25     5,502           17%
      Total                                             7,608           23%

    Second Quarter 2009:
      Crude Oil           $1.88       $1.47 - $2.04     3,780           11%

    Third Quarter 2009:
      Crude Oil           $1.77       $1.51 - $1.90       672            2%

    * in thousands



    Hawaiian Holdings, Inc.
    Reconciliation of Non-GAAP Financial Measures
    (in millions, except for CASM data) (unaudited)

                                        Three Months Ended  Nine Months Ended
                                           September 30,      September 30,
                                           2008     2007      2008     2007

    GAAP operating expenses               $312.6   $247.0    $856.6   $723.0
      Litigation settlement                   -        -      (52.5)      -
    Operating expenses, less
     litigation settlement                 312.6    247.0     909.1    723.0
      Aircraft fuel, including
       taxes and oil                       131.2     76.8     345.6    204.3
    Operating expenses, less
     litigation settlement and
     aircraft fuel                        $181.4   $170.1    $563.4   $518.8

    Available Seat Miles                 2,441.4  2,408.2   7,114.2  6,881.1

    CASM - GAAP                            12.80    10.26     12.04    10.51
                                           cents    cents     cents    cents
      Add back: Litigation settlement          -        -     (0.74)       -
    CASM - excluding
     litigation settlement                 12.80    10.26     12.78    10.51
                                           cents    cents     cents    cents
       Less: aircraft fuel                  5.37     3.19      4.86     2.97
    CASM - excluding
     litigation settlement
     and aircraft fuel                      7.43     7.07      7.92     7.54
                                           cents    cents     cents    cents
    Notes:
    ASM's represents total operations

SOURCE Hawaiian Holdings, Inc.

CONTACT: Peter Ingram, CFO, +1-808-835-3030,
peter.ingram@hawaiianair.com, or media, Alan L. Hoffman, Sr. VP,
+1-808-838-6758, al.hoffman@hawaiianair.com, both of Hawaiian Airlines; or
investors, Lena Adams, ladams@icrinc.com, or Andrew Greenebaum,
agreenebaum@icrinc.com, both of ICR, Inc., +1-310-954-1100, for Hawaiian
Holdings, Inc.
Web site: http://www.hawaiianair.com